Developing capacity & connection processes: A long term non firm capacity product? 27th June 2012

Why a new product? Allow new connections and existing site expansions access to the NTS ahead of agreed timescales for firm incremental capacity delivery Optimise the system prior to delivery of the firm capacity Could help mitigate uncertainty & delays for customers Where customer has significantly progressed their project and NTS connection is ready, but firm capacity lead time is longer In response to industry request to address concerns above Product would aim to cover the “gap” between customer gas flow date and NTS delivery date

Possible options Assumption: Covers period from customer’s gas flow date up to firm incremental capacity delivery date (where different), therefore non-firm Should the release be limited to the PCA/PARCA signatory / nominated party? Option A: Non-obligated capacity, with a buyback option that NG can call upon Utilises existing non-obligated capacity mechanisms Buyback option contract attached A number of possible buyback pricing options Option B: Long term off-peak/interruptible capacity Introduces new capacity product Sold through auctions - could be adhoc or fixed? Option C: Any other ideas/suggestions?

How might the options work?

Pros and Cons

What do you think…? What might work best – a version of one of these options, or something completely different? What works, what doesn’t? If viable, how could these options work better? Customer priorities/issues? Scope? Anything else….